By Christopher Guadagnino, Ph.D.

Published November 2007

• React to this article in the Discussion Forum.

RAB: The Premier healthcare alliance and a group of health care leaders launched the QUEST: High Performing Hospitals program to improve patient safety and quality in the nation’s hospitals, while safely reducing health care costs. It’s a three-year program through which participating hospitals will report data to Premier on a set of clearly-defined performance measures, including quality, efficiency, safety and patient satisfaction. Premier will analyze the data, facilitate sharing best practices and provide incentives for top-performing hospitals. QUEST is based on many of the same principles used in the Hospital Quality Incentive Demonstration project (HQID), which was a highly successful pay-for-performance initiative overseen by Premier and the Centers for Medicare & Medicaid Services (CMS). That project was extended for another three years and QUEST is building on its momentum, and also on the Institute of Healthcare Improvement’s (IHI) 5 Million Lives Campaign. At the end of the first part of the HQID project, Premier reached out to the top performers, and to the IHI, and we learned that there’s a tremendous need for a comprehensive approach to performance improvement which includes looking at quality and cost, as well as patient satisfaction. We also learned that there’s a need for providers to have more influence in transparency. This was the birth of QUEST.

RAB: At the moment, we have over 150 hospitals that have signed a letter of participation – nine of which are from New Jersey and 10 from Pennsylvania. We also have an advisory group with members from the IHI, from the Blue Cross Blue Shield Association, and from CMS, among others. We held an "accelerated solutions design" workshop, after which this group felt that an initiative was needed that would look at a comprehensive view of quality - including outcomes, appropriateness of care, patient satisfaction, efficiency and harm avoidance. The role of the advisory committee is to make sure that the results of the study will be generalizable to a broad community and to serve as an external guide in selecting appropriate ways to measure these items.

RAB: From the HQID project we learned that incentives and transparency can help drive performance. We also learned that it’s important to look at appropriateness of care and that, when patients receive all of the aspects of care that they were supposed to receive, they do better. At the end of that HQID project, it was felt there was a tremendous need to take a more comprehensive view of quality. The way QUEST differs from HQID is in its breadth. QUEST is looking at appropriateness of care, but also at clinical outcomes, patient satisfaction, harm avoidance and efficiency. The population is also slightly different: the HQID program focused solely on Medicare patients, while QUEST will be looking at all hospital patients and it will be a more comprehensive view. We’re not focusing on any one specific payor.

In October, one of the things the hospitals will do is decide on which of the precise measures they feel to be the most appropriate and most important for this project. Although the exact measures haven’t been defined yet, the five broad categories have been defined. Category one is appropriateness of care. We’ll probably include several of the measures from HQID and we may make some additions and deletions, depending on the newest evidence. These are process measures, looking at whether the patient received all of the components of care that they were supposed to receive based upon the medical evidence. These are typical measures that are being looked at by the Joint Commission as well as CMS, so they’re well-understood measures of process. The second category is clinical outcome and we’re looking specifically at overall risk-adjusted mortality. The third category is harm avoidance. We’re looking at the IHI’s 5 Million Lives Campaign and their methods of looking at harm, but at this point we haven’t settled on the measures. We think it’s particularly important to look at things like hospital-associated infections. We know these are very costly and we know there’s a tremendous interest in trying to eliminate hospital-acquired infections. Adverse drug events will also be a measure of that category. The fourth category will be efficiency, and for that we’re looking at case-mix-adjusted cost per case. The last category is patient satisfaction, and for that we’re looking at the CMS HCAHPS patient satisfaction measurement tool. Out goal is to avoid inventing new measures, but rather to try to take available measures and put them together in a comprehensive way. We’re going to begin establishing the baseline of performance and we anticipate launching the project in December at a kick-off meeting held in conjunction with the IHI National Meeting.

RAB: The program does include financial incentives. Premier has put up seed money for a reward pool and we are working with outside organizations including the Blue Cross Blue Shield Association and individual Blue Cross Blue Shield plans to see what we can do about increasing that reward pool, to be paid out in the third year of the program. There’s a tremendous shared interest in finding out appropriate ways of measuring performance in broad ways. Because the payers share this interest, we’re asking them if they’d like to contribute to this reward pool. No hospital’s participation is predicated on any particular plan’s participation in this project.

The reward will not be based on patient volume or reimbursement rates, but will be a flat amount per hospital depending on the level of performance. Also, the incentives will not be a competitive reward pool but rather a structure such that every hospital achieving top performance will be rewarded. Our goal is to move all of the hospitals from their baseline into the top quartile of these five areas. The baseline will be determined by the participants and derived from the most recent data period before the project begins. We’re measuring their performance in these five areas over the baseline, and the goal will be to establish a target of the upper quartile of that first year’s aggregate baseline for each of the five categories measured – that will be the target for 2010, when the project is done.

It’s a similar methodology to the one used in the HQID, with regard to setting a baseline and trying to move participants to a target. What we found from HQID is that, although many hospitals improved tremendously, no one hospital achieved top performance in all of the HQID measures. Our goal in QUEST is to try to drive performance broadly along all of the measures. Ideally, we would want to provide the highest incentives for those hospitals that reached the "bullseye," so to speak – those that were in the top quartile of all five categories of measurement. It’s possible that we could have a tiered reward that, if you got into four of them, or three of them, you’d have a different reward. The pool could be constructed to provide different rewards depending on how many areas a hospital has improved, but those mechanics have not been worked out yet.

Financial incentive is one component of this project, but it’s not the only component. Another key component is transparency. All of these metrics will be shared among the participants, and transparency is an important driver of performance. Another component is shared best practices. This is a collaborative. We want institutions to be able to exchange ideas on what’s working and what’s not.

RAB: It will be necessary for a hospital to have executive sponsorship. They commit to transparency of the data within this cohort, they commit to using a set of standardized tools, and they commit to being in this program for three years. Of course, there is a cost associated with using these tools, but they’re already in use in hundreds of hospitals across the country. Premier will bear all the costs of managing this cohort, including collaboration calls, webcast calls and face-to-face forums. Premier will do all the data analysis, and we also will provide participants with access to the Premier performance portal, which is an important way in which hospitals exchange information on best practices. Although there are always some costs associated with changing hospital practices, we know from the HQID data that, when you eliminate things like hospital-acquired infections and adverse drug events, you save a lot of money. There’s a lot of waste that gets avoided by the creation of these best practices. We think there’s a very good ROI for bringing processes in line with best practice.

RAB: This issue of aligning physician and hospital incentives was also present in the HQID project. It’s important to note that financial incentives are not the only incentives for physicians. Physicians are naturally motivated to provide high-quality care. What we’re finding is that, in many institutions, physicians understand that it’s in their best interest to make sure that the hospital is financially stable and is noted as a high performance hospital. The financial incentive gets everyone focused on the issue – the CEO, CFO and the COO – and those individuals are now learning that nothing in the hospital is going to take place without a physician order. In order for any of these types of projects to be successful there needs to be a strong physician-hospital partnership. We know this is already present in the most highly-performing hospitals, and that physician leadership is a central component of it. So it seems that an institution’s success is going to require a partnership among physicians and administrators, and it’s unlikely that providing a physician incentive distinct from a hospital incentive is really going to achieve a sustainable improvement. One of the nice features of QUEST is that we’ll be able to examine some of these unanswered questions, like aligning physician incentives with hospital incentives, and we’ll be able to learn from best practices.